“We see no evidence of a turnaround in the works,” Citi analysts wrote in a memo. “We have been surprised that quick fixes (like bringing back coupons) have not led to stronger sales, and we don’t see anything that will change this in the near-term.”

The downgrade came after J.C. Penney announced that CIT, the largest commercial lender in the U.S. apparel industry, was still financing deliveries from smaller manufacturers to its stores, contradicting a report in the New York Post on Wednesday.

Shares in J.C. Penney tanked on Wednesday after the tabloid’s report, citing anonymous sources, was published.

“The problems start with sales,” the analysts wrote. “Product on the floor is not resonating with core customers, and it will likely take until 2014 to get the right mix of apparel basics and private label fashion.”

Last month, Paul Rutenis, the company’s senior vice president and general merchandise manager of the home division, left after only a year on the job as sales fell 30 percent in his struggling home-goods section.

But J.C. Penney said on Thursday that it is still supported by all its key vendors and that it expects to close the quarter with about $1.5 billion in cash.

Citi lowered its target price to $11 in its memo, down from its previous $20 target.